Discuss about the Impacts of Corruption on Decision Making for World Bank.
Corruption is definable as the process through which an individual misuses the public power, public resources, or even private resources to make a decayed decision that deviates from the set criterion as a result of receiving a reward (Bentzen, 2012). Corruption has encroached into the global society making it a day to day norm, therefore, United Nations, World Bank, and other international bodies have realized the need of fighting against it. Most of Corruption in political and business arenas that eventually affects the moral actions and cultural values. Corruption is common when a large sum of money, or vast quantities of products such as pharmaceuticals or even when multiple players are involved. Whenever corruption happens, a lot of money and resource are lost, thereby drawing back the countries, organizational economics, and profit collection. Furthermore, corruption taints bad images to the partners involved; therefore a significant number of individuals, states, and organizations strive so hard to launch fight against corruption to regain their reputation (Asongu, 2012). The fight has led to the ranking of different companies in the transparency site with Denmark at the top of the list as the less corrupt. According to corruption perception index 2016, Canada placed number nine, with a score of 82 compared to 83 in 2015 show that the country is working toward reducing corruption in all sectors (Barutciski & Bandhi, 2015). However, some companies and individuals in Canada still engage in corruption activities. To that effect, there is need to restudy the corruption in the country. The paper examines the impact of corruption on the senior management and how these results are able to be alleviated. The paper narrows down to a Canadian company known as SNC Lavaln that has been prone to corruption cases.
Corruption does not represent a substantial to doing business in Canada as the country poses clear regulations and transparent institutions that are liable to raising concerns and investigating allegations made about corruption, or illegal business activity (Jain, 2017). The Canadian government has placed policy and rules against bribery making the Criminal Code of Canada is the necessary policy that allows the Canadian courts, police and other public services to fights corruption, bribery, and abuse of the office. However, some percentages of Canadians still face fraud charges.
According to the corruption report done by the Canadian government, more than four in ten people always witness wrongdoing at work again creating the need to examine the transparency rate in Canada (Dan, 2016). The evidential name of the Canadian company that has faced corruption allegations and charges is the SNC Lavaln. SNC Lavalin is one of the leading engineering and construction company based in Montreal; the firm deals with wide range of products such as mining and metallurgy, oil and gas, water and both hydro and nuclear power. The company came into light of corruption in 2010 when murky report succeeded against the organization of corruption allegations. The company accused in 2008 of bribery and financial fraud that related to the renovation and modernization contract of the hydroelectric power stations in India. The investigations carried out by both the Canadian and Indian government led to the expulsion of several Indian government officials that led to the loss of about exchequer 37.45. The event prompted the Canadian government to place more emphasis on the series of ethics and compliance initiatives within the SNC Lavalin. The company faces other controversies such as the relationship between it with the Muammar Gaddafi’s government, which led to leaving behind of about $ 22.9 million in the Libyan’s banks when the company pulled out. Another controversial relationship includes that of Dr. Arthur Porter former chief executive officer of the University Health Centers that saw the company winning a controversial contract of $1.3 billion after receiving a bribe of about $22.5 million. These numbers of corruptions later in September 2013, led to blacklisting of SNC Lavalin and its affiliates from bidding on the World Bank’s global projects.
Although it is common to all business that every activity engaged should be a profit making some activities tends to cause of bad brand image, therefore, there is profound need to protect the goodwill and acceptance of the business among the stakeholders. If a business a business .Corruption in business at most of the time affects the stakeholders mostly in the management positions. Business corruption usually occurs between the managers and official public engagement who seek t service in favor of others. Some of the favors are either legitimate or illegitimate (Vazquez 2016). Examples of the legitimate favors requested by the business from the public officials include seeking of trading rights, license, permits, and award of contract tender without following stipulated procedures while the illegitimate favors include activities that business engages to evade lawful payments such as the tax evasion, suppression of wrongdoing.
Managers being the primary decision makers find it very difficult to carry out their mandates in corruption-related environments (Godinez & Liu, 2016). The manager always operates between moral conscience and profit objectives and conflicts between one’s legal obligations and career advancements. Decision making in a corruption-related situation is different and more difficult than deciding ethical decision-making process (Sun et al., 2011). The ethical decision-making process involves the concept of differentiating the wrong from the right, while the corruption-related decision involves consideration of the company’s values, and other factors such as personal gain of wealth. The corrupt decision-making process tends to be slow in comparison to the ethical decision making. The process always tends to be time-consuming because the players involved never want to decrease the information from the public, thereby making it follow longer steps.
The corruption causes difficulty in monetary decisions by the manager as the payments and the bribes always tend to raise the overall business operations (Lee & Eo, 2016). The increased level of operation hinders possible growth by not allowing a free market to operate. The high operation levels always pose companies to be in financial constraint therefore affecting the ability to pay suppliers, the employees and any other subscription of any legal requirement as a result there is a slowdown of the company activities such that might lead to the expulsion of the manager from the position.
Decision making in a corrupted situation is always challenging, lengthy and requires sensitivity from the management so as to prevent the scam getting into the public platform that might call on the investigations. As a result of the care taken, certain activities tend to take much time before accomplishment (Ngira, 2015). Managers always find it difficult to make decisions against the subordinate that are still caught doing suspicious activities such as bribe as many tend to argue in respect to the company or the interdicted leader. They tend to justify their situation as the business culture since also the leaders also practice it.
Whichever way, decisions made by the managers, always result into either positive or negative impact to the organization (Intezari & Panteen, 2016)). When a body is allegedly or charged with corruption, they tend to face significantly lower returns on assets and sales. Studies show that corporate social responsibility directly relates to the behaviors of the society that are considerable to be the source of the market to the companies. With the tainted image, some customers tend to shy away from the products and services. The reduced return places the manager in a desperate situation in making decisions due to financial constraints. When a company is corrupt, the culture tends to change making the staffs react differently as some tend to follow the leader’s traits of corruption. The unwanted culture makes the management to be difficult (Dexit, 2015). The decision making in a corrupt environment is always tricky with the tainted image; the business consistently faces rejection in some business transactions and tender award and might end up blacklisted.
From the discussion above, there is no doubt that corruption has a significant number of adverse effects on the organization and the management decision-making process. Therefore in dealing with the crime-related situations, managers need to enlarge the frame of reference of their title to include the rejection of the stakeholder and the possibility of business closure. Good governance helps in alleviating corruption in business (Dexit, 2015). Good governance ensures strengthening of the business ethics that comprises principles and standards that offer guidance to the behavior of the stakeholders of a particular industry. Examples of business ethics include honesty, conflict of interest, fairness, communications organizational relationship education, end of impunity.
The first stage of fighting corruption is always the ending of the impunity through enforcement of stringent laws and regulations that will see the culprits punished. Honesty is a virtue that requires being open and transparent in all issues, and this will help to avoid the recruitment of individual who is out to launder the organizations’ resources (Asongu, 2012). The transparency will allow easy access to the organization’s information that eases auditing hence reduces the probability of corruption as it put the managers under the watch. The company can also reduce the corruption activities through the creation of a stringent rule that deals with the unethical behaviors by education and training on the required business ethics. The training will ensure that the business culture is maintainable resulting in an excellent organizational relationship. The organization should always perform resource and finance management through contracting independent auditing agencies as they tend to rebuild confidence and image more than personal auditing. Fairness is the quality of embracing equitability and impartiality to all the stakeholders by following the applicable rules and laws within a given societal domain. Conflict of interest exists when different societal fields exist in the same situation differently for example when a manager has to choose between their interest and that of the group.
With the aid of education among the society and the staffs, alleviation of corruption is achievable as many people can know and understand the justice and legal actions in case of such thing happen for them. The strengthening of the society to demand transparency will help in putting the organizations into accountability. Corruption in the business is preventable through the change of the top corrupt management officials and placed to face full punishment by the government (Vazquez, 2016). The government can even close down the entire international loopholes that enable the corruptible companies and individual to hide the public resources. Such moves include the launch by the European Union of Anti-Money Laundering directive that requires all members of the European Union to register all the beneficial owners of companies established with their borders even though kept out of public view.
Hofstede model designed by Greet Hofstede who based the research on the cultural diversification and differences grouped in four. These are individualistic, power distance, uncertainty avoidance, masculinity, and long-term orientation. The model is used to investigate and analyze corruption perception index. Culture as the independent variable to come up with dimensions that relate to corruption uncertainty avoidance; a cultural restraint relates way people respond to uncertain situation especially when decisions are needed as they prefer organization with well-established cultural values. The model explains the future orientation as the extent to which a society focuses on the organizational future that requires proper decision making in planning, controlling, and organizing. Institutional collectiveness collaborates when individuals get encouraged to be included in the groups within the organization as a result of the transparency of the company. When people join the groups, then decision making is straightforward and simple for the senior management. Human orientation allows the individual to have the ability to be tolerant of mistakes done with another individual at the same time hold the high degree of responsibility. Therefore business and governments must acknowledge that roles of culture in fighting corruption.
Conclusion
Corruption affects the economic development of an organization and a country. The unethical activity results to loss of public resources such as many, damage of the brand image, reduction of sales turn out. For the success of an organization, decisions made by the managers, and this always tends to be difficult in a corruption-related situation. The crime that takes place within a small enterprise still affects the general image of a country, thus leading to acquiring different ranking bin the transparency list. Therefore, it is upon the organizational leadership and the government to strengthen the measures placed to curb any corruption.
References
Asongu, S. (2012). Globalization, (Fighting) Corruption and Development: How are These Phenomena Linearly and Nonlinearly Related in Wealth Effects?. SSRN Electronic Journal. https://dx.doi.org/10.2139/ssrn.2493263
Barutciski, M., & Bandali, S. (2015). Corruption at the Intersection of Business and Government: The OECD Convention, Supply-Side Corruption and Canada’s Anti-Corruption Efforts to Date. SSRN Electronic Journal. https://dx.doi.org/10.2139/ssrn.2691496
Bentzen, J. (2012). How Bad is Corruption? Cross-country Evidence of the Impact of Corruption on Economic Prosperity. Review Of Development Economics, 16(1), 167-184. https://dx.doi.org/10.1111/j.1467-9361.2011.00653.x
Das, N. (2016). Corruption and Corporate Corruption. Anveshana: Search For Knowledge, 6(2), 101. https://dx.doi.org/10.23872/aj/2016/v6/i2/139212
Dixit, A. (2015). How Business Community Institutions Can Help Fight Corruption. The World Bank Economic Review, 29(suppl 1), S25-S47. https://dx.doi.org/10.1093/wber/lhv016
Godinez, J., & Liu, L. (2016). Corruption and Its Effects on FDI: Analysing the Interaction Between the Corruption Levels of the Home and Host Countries and Its Effects at the Decision-Making Level. Journal Of Business Ethics. https://dx.doi.org/10.1007/s10551-016-3380-7
Intezari, A., & Pauleen, D. (2017). Conceptualizing Wise Management Decision-Making: A Grounded Theory Approach. Decision Sciences. https://dx.doi.org/10.1111/deci.12267
Jain, A. (2017). Fighting corruption: contemporary measures in Canada. Canadian Foreign Policy Journal, 23(1), 93-116. https://dx.doi.org/10.1080/11926422.2016.1270846
Lee, K., & Eo, Y. (2016). The impact of corruption on budgetary decision making for disaster management in local government. The Korean Journal Of Local Government Studies, 20(2), 153-179. https://dx.doi.org/10.20484/klog.20.2.7
Ngira, D. (2015). Corruption and Human Rights: The Role of Judicial Activism in the ‘Fight’ Against Corruption. SSRN Electronic Journal. https://dx.doi.org/10.2139/ssrn.2670770
Sun, Y., Li, S., Bonini, N., & Su, Y. (2011). Graph-Framing Effects in Decision Making. Journal Of Behavioral Decision Making, 25(5), 491-501. https://dx.doi.org/10.1002/bdm.749
Vazquez, P. (2016). Family Business Ethics: At the Crossroads of Business Ethics and Family Business. Journal Of Business Ethics. https://dx.doi.org/10.1007/s10551-016-3171-1
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download
